The PEAKS Act amends Title XVIII of the Social Security Act to protect certain rural hospitals’ critical access hospital (CAH) designation and to change the mileage standard used for ambulance services furnished by CAHs in mountainous terrain or where only secondary roads exist. It adds a new paragraph to 42 U.S.C. 1395i–4(h) that deems a hospital—which as of enactment is a CAH and can show it previously met the 15‑mile mountainous/secondary‑roads distance requirement—to continue meeting that 15‑mile standard after January 1, 2026, subject to conditions and new CMS regulations.
The bill also amends 42 U.S.C. 1395m(l)(8) to treat a 15‑mile drive (instead of the standard 35‑mile metric) as the qualifying distance for certain ambulance services furnished by CAHs in mountainous or secondary‑road areas for services on or after January 1, 2026. The Secretary must issue implementing regulations within one year, leaving important definitional and evidentiary choices to CMS.
The practical effect: a legislative backstop for some CAH designations and a lower mileage threshold for Medicare ambulance reimbursement in rugged rural areas—changes with direct implications for rural hospitals, EMS providers, and Medicare outlays.
At a Glance
What It Does
The bill adds a deeming rule to the CAH statute that preserves the 15‑mile mountainous/secondary‑roads distance qualification for hospitals that were CAHs at enactment and can demonstrate they met that distance test at last certification, and it amends ambulance reimbursement law to count a 15‑mile drive (for services on/after Jan 1, 2026) in mountainous/secondary‑road areas.
Who It Affects
Small rural hospitals currently designated as CAHs, rural ambulance/EMS providers that bill Medicare, CMS (for rulemaking and enforcement), and the Medicare program (through potential payment changes).
Why It Matters
The bill prevents certain CAHs from losing designation over proximity changes and creates a lower mileage standard for ambulance reimbursement in rugged areas—both measures protect emergency access in rural terrain but shift programmatic and fiscal choices to CMS for implementation.
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What This Bill Actually Does
The PEAKS Act intervenes in two narrow but consequential parts of Medicare’s rural hospital and ambulance rules. First, it amends the CAH designation rules to create a statutory “deeming” pathway: a hospital that was a CAH on the date of enactment and can show (under criteria CMS will set) that it satisfied the 15‑mile mountainous‑terrain or secondary‑roads distance test at its last CAH certification will be treated as meeting that 15‑mile requirement on or after January 1, 2026.
The deeming provision is conditioned: the hospital must have been designated as a CAH as of enactment, must demonstrate prior compliance, and the text includes a clause concerning the presence of a new hospital or facility within a 10–15 mile band after enactment.
Second, the bill changes the mileage used for ambulance services furnished by CAHs. Where the statute previously references a 35‑mile drive for certain Medicare ambulance rules, the amendment instructs that for services furnished on or after January 1, 2026, in mountainous terrain or areas with only secondary roads, a 15‑mile drive should be used.
That alters when Medicare will treat ambulance transports as meeting distance‑related payment criteria in rugged areas, effectively lowering the miles‑required threshold for those circumstances.The bill gives the Secretary of Health and Human Services one year from enactment to issue regulations implementing the new CAH deeming rule. The statute leaves several evidentiary and definitional matters to CMS rulemaking: how hospitals must ‘demonstrate’ their prior compliance, what counts as a ‘new hospital or other facility described in this subsection’ within the 10–15 mile band, and the duration of the deeming (the text does not itself set an automatic expiry).
Those regulatory choices will determine how broadly hospitals benefit and how CMS administers payments for the adjusted ambulance distance standard.
The Five Things You Need to Know
The bill adds paragraph (4) to 42 U.S.C. 1395i–4(h) to deem certain hospitals to meet the 15‑mile mountainous/secondary‑roads distance requirement for CAH status on or after Jan 1, 2026.
To qualify for deeming, a hospital must be a CAH as of enactment, show (per CMS rules) it met the 15‑mile test at its last CAH certification, and meet a condition about a new hospital or facility located within 10–15 miles after enactment.
The Secretary must promulgate regulations to implement the new deeming paragraph within one year of enactment.
The amendment to 42 U.S.C. 1395m(l)(8) treats a 15‑mile drive (for services furnished on/after Jan 1, 2026) as the qualifying distance for ambulance services in mountainous terrain or areas with only secondary roads, instead of relying solely on the prior 35‑mile metric.
Both changes take effect for relevant services or determinations on or after January 1, 2026, shifting key implementation and definitional work to CMS rulemaking.
Section-by-Section Breakdown
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Short title (PEAKS Act)
This is the bill’s captioning provision. Nothing operational here—just the name under which the subsequent changes to Title XVIII are to be read: 'Preserving Emergency Access in Key Sites Act' or 'PEAKS Act.' It signals the bill’s stated purpose: preserving emergency access in rural or hard‑to‑reach locations.
Deeming rule for hospitals that met mountainous/secondary‑roads distance requirement
This is the substantive CAH change. The bill inserts a new paragraph (4) that says: if a hospital was a CAH on enactment, can demonstrate it met the 15‑mile mountainous/secondary‑roads test at its last CAH certification, and after enactment 'has a new hospital or other facility described in this subsection located within 10–15 miles of the hospital,' then it shall be deemed to meet the 15‑mile distance requirement on or after Jan 1, 2026. The provision requires CMS to write regulations within one year. Practically, the provision protects certain hospitals from losing CAH status due to changing geography or facility openings, but it ties the protection to CMS’s forthcoming rules and to the curious 10–15‑mile clause that will need regulatory interpretation.
15‑mile ambulance distance for mountainous/secondary‑road areas
This amendment modifies how ambulance distances are measured for CAH‑related Medicare payment rules. Where the statute references a 35‑mile drive, the bill adds language that, for services furnished on or after Jan 1, 2026, in mountainous terrain or areas with only secondary roads, a 15‑mile drive should be treated as qualifying. The mechanical change reduces the mileage threshold that triggers certain Medicare considerations for ambulance transports in rugged areas; the exact payment implications depend on how existing rules reference the 35‑mile figure and how CMS implements the new 15‑mile carve‑out.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Rural hospitals currently designated as CAHs — The bill creates a statutory protection that lets qualifying hospitals preserve their CAH designation even if geography changes or nearby facilities appear, potentially maintaining cost‑based Medicare payment and other CAH flexibilities.
- Rural EMS and ambulance providers serving mountainous or secondary‑road areas — By treating a 15‑mile drive as the qualifying distance for ambulance services in those areas, the bill increases the circumstances under which Medicare will recognize shorter transports as meeting distance‑related payment criteria.
- Rural patients and local communities — By aiming to preserve CAH status and adjust ambulance rules for rugged terrain, the bill reduces the risk of service contraction and helps sustain local emergency access.
Who Bears the Cost
- Medicare trust funds / CMS payments — Lowering the distance threshold for qualifying ambulance transports and preserving CAH designations can increase Medicare outlays relative to a baseline where CAHs lose designation or ambulance payments remain constrained.
- CMS (HHS) — The agency must develop rules within one year and will face implementation, monitoring, and appeals workload to operationalize the deeming test and distance exceptions.
- State health systems and competing hospitals — Some nearby hospitals or newly opened facilities may face changed competitive dynamics if neighboring facilities retain CAH status and associated payment advantages; states may also see altered referral patterns and certificate‑of‑need calculations.
Key Issues
The Core Tension
The central dilemma is preserving emergency access in sparsely populated, hard‑to‑reach areas versus protecting Medicare’s program integrity and fiscal sustainability: the bill favors preserving CAH status and expanding ambulance‑payment coverage in rugged areas, but doing so risks higher Medicare spending and creates opportunities for strategic behavior unless CMS draws narrow, evidence‑based boundaries in its implementing regulations.
The bill leaves several consequential questions unresolved and hands significant discretion to CMS. The statute requires hospitals to 'demonstrate' prior compliance with the 15‑mile mountainous/secondary‑roads test but says nothing about the standard of proof, the supporting evidence (maps, certification dates, travel‑time studies), or whether CMS may demand repeated demonstrations.
That ambiguity creates both a compliance burden for hospitals and a broad enforcement gate for CMS.
The clause about a 'new hospital or other facility … located within 10–15 miles' is particularly opaque. Read literally, it appears to preserve deeming even when a new facility opens within that 10–15‑mile band, but the bill does not explain whether the presence of such a facility is a trigger for loss or a condition to keep protection.
That gap matters: depending on CMS’s reading, the provision could either block loss of CAH status when competitors appear nearby or narrow protection to places where new development falls within a specific range. Finally, the fiscal impact is undefined—lowering ambulance distance thresholds and sustaining CAH payments will likely raise Medicare costs in aggregate unless CMS pairs these changes with offsetting adjustments elsewhere.
The bill therefore solves an access problem in rugged country while shifting implementation, definitional battles, and budgetary consequences to agency rulemaking.
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